By Alisha Sanders

“How will we pay for services?”

That’s the number-one question I get during presentations and conversations about implementing housing plus services models in affordable senior housing communities. Unfortunately, I generally don’t have a good answer.

Right now, these communities are funding services through a variety of mechanisms: they squeeze money out of their operating budgets, apply for grants, collaborate with community partners, solicit in-kind donations, or come up with other creative maneuvers.

This bootstrapping approach can mean a couple of things. Potentially good service ideas may not get fully developed or could go away after some time. And those good service ideas may not get replicated in other communities.

Exploring Financing Options

This dilemma is what’s underpinning a current project at the LeadingAge LTSS Center @UMass Boston to explore financing options for service programs in affordable senior housing communities.

Our research team—including myself, LTSS Center Co-directors Marc Cohen and Robyn Stone, Nancy Eldridge from the National Well Home Network, and David Grabowski of Harvard University—is using a grant from the Gordon and Betty Moore Foundation to identify the potential opportunities, barriers, and limitations to supporting housing-based service programs.

During the course of our research, we interviewed a range of stakeholders, including experts in health care policy, regulation, and financing; health provider entities; and managed care organizations. Combining the information gathered during these interviews, and our review of the literature, we developed a broad set of potential financing mechanisms for housing plus services options.

Then, on April 10-11, we brought our stakeholder experts together for a convening in Washington, DC, to:

  • Vet the options that LTSS Center researchers had developed,
  • Consider which options may be most feasible to implement, and
  • Begin to identify paths for moving forward.

Financing Challenges

Our exploration into funding options has focused primarily on Medicare and Medicaid. This is because we are seeking funding sources that are sustainable and broadly available across communities.

We know that most residents in affordable senior housing settings are Medicare beneficiaries, and many are dually eligible for Medicaid. In addition, research by us and others has found that the availability of services programs can impact the use of health services. For older adults, those health services are covered primarily by Medicare.

One participant in our convening said it’s easy to find the “cons” for our proposed options and harder to find the “pros.” It’s true. Bringing together affordable housing plus services settings and models, and the Medicare or Medicaid program, can feel like putting a square peg in a round hole.

A key challenge is the volume of residents associated with any one provider or payer. Within a housing community, residents can be using traditional fee-for-service Medicare or they may be enrolled in some form of managed care. Within either of those buckets, residents can be using multiple providers or plans. This makes it difficult to create a business incentive for any one health entity to collaborate with a housing community when that community may only house a small number of the health entity’s patients or members.

In addition, Medicare and Medicaid restrictions on the types of services provided, how services are delivered, and who can deliver the services, are at odds with the nature of housing-based service coordination and wellness programs.

Enthusiasm for Multiple Financing Options

Despite these and other hurdles, there was tremendous enthusiasm at the convening for developing potential financing options. The stakeholders in the room said they believed that housing-based models make sense and that there is value in finding sustainable mechanisms to support those models.

There was general consensus that there may need to be multiple financing mechanisms to capture both the fee-for-service and managed care populations living in housing communities.

On the fee-for-service side, there was interest in exploring development of some form of an alternative payment model that would build on the concepts of patient-centered medical homes or health homes. At a high level, these models can provide a mechanism for acknowledging and coordinating services to meet all of an individual’s needs, not just medical needs.

On the managed care side, there was interest in exploring ways in which supporting these service models could be considered a plan benefit that could be covered through the plan’s rates.

Across both dimensions, though, there’s a belief that there likely needs to be mechanisms, on both the housing side and the provider or payer side, to address challenges associated with the fee-for-service/managed care split among housing residents, and the volume challenges facing health providers and plans. This could mean something like creating intermediary entities from which providers and/or payers purchase services that are delivered across multiple housing properties to their patients or members.

There’s still lots of investigation to be done around all the potential financing options. And none of those options will be easy to implement. But we’ve made a good start, thanks to the enthusiasm of our stakeholders and their commitment to keep working with the LTSS Center on this effort. We’ll keep you posted on our progress.

Alisha Sanders is director of housing and services policy research in the Washington, D.C. office of the LeadingAge LTSS Center @UMass Boston.